Located in the northern part of South America, Venezuela is a country with a population of 28.3 million people and a GDP per capita of $1,691 as of 2020. The country’s economy has always relied on crude oil, so much so that Venezuela was the world’s biggest exporter of petroleum up to the 1970s. Things started to take a serious downturn during the presidency of Hugo Chávez, resulting in a severe decline in oil production and hyperinflation.
The Venezuelan economy suffered a collapse after oil prices declined in 2014, causing the country’s GDP to drop by a whopping 75% between 2014 and 2019. In turn, this resulted in what can only be described as a humanitarian crisis that deepened even further after the coronavirus pandemic hit the country in 2020.
Considering this grim economic landscape, it comes as no surprise more and more locals are beginning to turn to gambling as a means of making ends meet. Venezuelans try to earn a little extra on the side by exploring different options, from back-street wagering parlors and race betting to the lottery-style game Los Animalitos, which is all the rage among locals at the moment of writing.
The country legalized gambling back in 1997 but this is not to say betting was unavailable to Venezuelans before that. Gambling venues operated in Venezuela before 1997 with special permission from the authorities. However, the sector was plagued by corruption and largely dominated by organized crime groups.
The local gambling industry has been far from thriving even after the legalization. At the moment of publication, Venezuela is home to five landbased casinos, with most of the other venues closing down as a result of the coronavirus pandemic and the severe economic crisis the country has been battling over the past few years.
Laws That Govern Gambling in Venezuela
Gambling in the Bolivarian Republic of Venezuela falls under the provisions of Law № 36.254, also known as Ley Para el Control de los Casinos, Salas de Bingo y Máquinas Traganíqueles (Law for the Control of Casinos, Bingo Rooms, and Slot Machines). The legislation came into effect in July 1997 with the approval of the republic’s Congress.
It led to the establishment of the Comisión Nacional de Casinos, Salas de Bingo y Máquinas Traganíqueles (National Commission of Casinos, Bingo Rooms, and Slot Machines). The latter is a decentralized regulatory body that operates under the umbrella of the Venezuelan Ministry of Finance.
Social Responsibility and Penalties for Violation
Venezuelans can engage in gambling activities but only on condition they are 18 years old or older. Article 29 of Law № 36.254 expressly prohibits any advertising, promoting, and marketing of the gambling games that fall within the legislation’s scope. This applies to marketing across any media, be it television, radio, newspaper publications, or the internet.
2Restrictions on Entrance
Minors cannot enter the gambling premises even if they are emancipated. For clarification, an emancipated minor is a person who has not yet reached the age of majority in their respective country but at the same time, their parents have relinquished the responsibility for the child. The law also prohibits inebriated or intoxicated persons from entering Venezuelan casinos or bingo halls.
The prohibition applies to employees of law enforcement, the armed forces, and judicial authorities unless their entrance is necessary for the fulfillment of their job. Additionally, patrons cannot enter provided they carry weapons of any kind. The ban extends to disabled persons as well.
3Penalties for Violation of Law № 36.254
Gambling operators who violate any articles of Law № 36.254 face a range of penalties, depending on the severity of their contravention. Common offense examples include providing false information, offering unauthorized gambling games, advertising a gambling establishment, or allowing entry to individuals disallowed from playing for one reason or another.
The National Commission of Casinos, Bingo Rooms, and Slot Machines has the remit to sanction operators found guilty of breaching the rules. The sanctions usually come in the form of fines ranging from 2,000 tax units to 10,000 tax units. If an operator commits the same violation again, the Commission will impose twice as high fines. Repeated violations result in definitive license suspension.
License revocation is possible in severe cases. Operators who have their permits revoked cannot apply for new licenses until ten years have passed from the date of revocation. The heaviest penalty of all is imprisonment. Individuals found guilty of running casino facilities or bingo rooms without a license can end up in jail for three to four years.
Respectively, they will have their gaming equipment confiscated in line with Article 54 of Law № 36.254. The sanctions’ application falls under the provisions of the Organic Law of Administrative Procedures (Ley Orgánica de Procedimientos Administrativos) and the Organic Tax Code (Código Orgánico Tributario).
Online Gambling in Venezuela
Venezuela has had online gambling since 2012, which is a rare thing to see in countries devastated by extreme poverty, economic collapse, and hyperinflation. In such regions, the gambling sector either goes unregulated or is altogether illegal. Venezuela is one of the few exceptions to this rule but there is no clearly defined legislative framework that governs such activities.
Sports Betting in Venezuela
Hundreds of off-course wagering points were strewn all around Venezuela, but many of them had to close shop following the economic collapse. Illegal wagering on sports is regrettably rampant in Venezuela, with some industry experts estimating it is almost 60 times the size of the legal market.
One possible explanation for this tendency has to do with a legislation that restricted the maximum sports bets to VEF1,000. As a result of the devastating hyperinflation, this is equivalent to a meager fraction of the USD, and more specifically to 0.0000000024029686 US dollars. Said legislation was repealed later on but it pretty much wrecked Venezuela’s legal sports wagering industry.
Another reason why Venezuelans prefer to bet with unauthorized sportsbooks is that they can pocket their profits in the US dollar and use it as a currency instead of the highly devalued bolívar. In fact, many sports betting parlors in the country take action solely in the USD.
Finally, betting on horse races is also legal in Venezuela. It falls under the regulatory remit of the Tourism Promotion Ministry, and more specifically its division the National Superintendency of Equestrian Activities (La Superintendencia Nacional de Actividades Hípicas).
The severe economic collapse and hyperinflation have significantly slowed down the progress of Venezuela’s gambling industry. While both landbased and online gambling are legal in the country, economic instability and high tax rates have caused many authorized gambling operators to go bankrupt. Because of this, unauthorized gambling is booming in the country, greatly surpassing the legal market in terms of volume.
On a more positive note, the industry has seen some developments recently such as the introduction of crypto gambling via the Petro currency. Last but not least, Venezuelans have the option to engage in online gambling activities at offshore-licensed sites that accept registrations from the country and work with the local currency, or the widely preferred US dollar. Hopefully, Venezuela’s gaming sector will see better days once the country emerges from the economic crisis that devastates it.